Here's a phrase you're about to hear a lot more of — if you haven't already: the "Internet of Things."

Why? It's about to be the next big thing. What does it mean? It's not just computers and phones that are linked up to the Internet — it's your stuff: refrigerators and glasses and trains and buildings.

The buzz about the Internet of things really took off earlier this year, when Google acquired smart thermostat and smoke alarm company Nest for $3.2 billion. What else is a member of this new club? Wearable devices like the Fitbit and Nike FuelBand trackers that monitor our physical activity and store that data in the cloud, Google Glass and more. But the surprising twist is that the big money in this next big thing may lie in a slightly less sexy arena than you'd think. The real future of devices that talk to each other may lie not in Google users but in smart-ifying, formerly clunky industrial companies.

Folks who have worked on building automation, railroads, heating efficiency and more are stepping full force into the Internet of Things space. Companies like Cisco ("Internet of Everything"), GE ("Industrial Internet") and others in the Valley that were around long before the dot-coms showed up now have the chance to make big-time bucks by smartening up a bunch of hefty, old-school stuff that affects our daily lives.

Examples? Take a smart sensor that GE is testing … in prisons. Or GE's robotic hospital systems that would handle everything from deliveries to sterilization. Or Cisco's "Internet of Everything" public sector projects — now underway across the globe: In Stockholm, the company has put cameras on city streets to monitor traffic activity and sensors to track public buses.

Varun Nagaraj, one of the players in this hot new market, is CEO of an "old" (by Valley standards), $16.5 million company called Sierra Monitor Corp., which provides gas and flame detection systems and gateway products that connect old and new things to a network. He is more pumped about the industrial Internet of things than the consumer -focused market. Meaning he's more into railroads and building automation than your Jawbone and Fitbit.

Smart cities, smart trains, smart factories — as Nagaraj puts it, those are the changes that, "over the next 20 years … will make a material difference to society, that will make a material difference to the economy … as opposed to an individual being able to measure how fit he is or not."

And though the Internet of Things is the hot new thing, it's actually been growing under the surface for ages — companies like Comcast, Verizon and AT&T have been selling home security packages with connected devices. But there remains a ton of potential to "connect" (hook up to the Internet) our transportations systems, our highways, our large-scale agriculture — even our warships. Smarter highways might mean lanes that could adapt to traffic flow or roads someday that could serve fleets of autonomous vehicles driving 100 mph, just inches apart.

Here's your cheat sheet for understanding the next Facebook — and here are three big reasons why the Internet of Things is about to explode:

1. COST:

It used to cost a ton of money to connect stuff to the Internet. No more. It's cheaper and easier to connect things than ever before, so more stuff can become intelligent. For example, Nagaraj says a parking meter can now be part of an intelligent city for just a few dollars — the cost of linking the meter to a sensor that detects if a spot is occupied or not, and to install a smart sign indicating to drivers if the parking spot is already taken. "In the past you could have done it, but it might have cost you $100," he said. "Now it costs you $5, and suddenly there is a business case to turn a parking meter into an intelligent parking meter."

2. BIG DATA AND ANALYTICS:

We're all data nerds these days. And as Nagaraj explains, "All kinds of dumb devices in the past now suddenly have the ability to tell you what they know." With all the information flowing through, he says people can crunch the data to reveal new insights to make smarter decisions. For instance, smart streetlights in a city might be able to be dimmed on slowly during an evening when the electric grid is facing high peak demand — instead of wasting energy. Or a connected city with smart parking meters might be able to direct drivers to available spots.

3. FINANCIAL:

The industrial Internet of Things has the potential to fundamentally move society forward, Nagaraj believes. These innovations could include cities developing connected transport systems and factories working only when they need to work, when demand requires it. "It is those changes over the next 20 years that will make a material difference to society … [and] to the economy, in my opinion." But who stands to reap the greatest financial benefit remains to be seen: It could be the old industrial conglomerates (think GE, Siemens, Honeywell), small to midsized companies trying to build bigger, or the venture capital world.

Venture capitalists, for one, aren't fully on board yet — precisely because it's hard to track who the clearest financial winner will be. Which may actually be why big companies (GE, Cisco and others) will be the most successful. There can only be so many Nests.

Sanjay Sarma, a professor of mechanical engineering at MIT, tells OZY that the huge challenge remains that the Internet of Things is still in a Wild West state. (Sarma's colleague Kevin Ashton is credited with inventing the term "Internet of Things.") Everything's being developed in an "ad-hoc manner," says Sarma, which means the field is missing a "dominant architecture" or common language — like what the World Wide Web is to the Internet or what alternating current (AC) is to power grids. For designers, a dominant architecture makes things easy to understand and build systems around. Without that, Sarma says, security becomes a problem.

All of this — even the challenges — sound like a big, big opportunity for someone hungry to solve. So open the doors for the next big thing.

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